The Chicago Fed’s National Activity Index has been soft lately, leading economists to think, in the words of Lewis Alexander, chief U.S. economist at Nomura Securities, that U.S. economic growth is “ok” but not “great.”

The index is a weighted basket of 85 indicators measuring the economy and is meant to provide a snapshot of national economic activity and inflation pressures. Readings at zero suggest the U.S. economy is growing at its long-run trend. The index sank below zero in May, and has only been above zero in four months since January 2015.

San Francisco Fed President John Williams said he wasn’t so concerned about recent soft readings in this report. He said the index is weighted too heavily toward manufacturing, which is skewing, if not the report itself, its interpretation. In addition, the “long-run” trend growth rate of the economy has slowed, meaning the report’s trackers may need to recalibrate their expectations, Williams said in an interview with MarketWatch.

Here’s the excerpt:

MarketWatch: One piece of data that seems to contradict what you’re saying and seems to show the economy might not be doing so great is the Chicago Fed’s national activity index. It’s a broad measure of the economy and has been trending lower.

Williams: That’s a good question because I track that series. That is based on a very sophisticated econometric or statistical analysis on a wide range of macro data developed by academics, and the Chicago Fed updates that regularly, and so it is an important indicator. So I think a couple things I would point to about the readings we’re seeing on that. One is that three or four years ago, when unemployment was way above the natural rate or the full employment level, we needed to see growth above trend. We needed to see these indicators telling us we’re above the line for normal, we’re growing faster than the potential output of the U.S. economy. And so, of course, we always want to see really strong readings on the Chicago Fed national activity index and every other index. Well, now we’ve got unemployment below 5%, the economy basically—I still want to see good solid growth—but we’re not really expecting to see an economy that is outpacing trend by a large amount. So getting trend growth, which I think of as around 1.5% -1.75% for trend GDP growth, some number like that, my forecast would be just a little bit above that. So you kind of got to lower your expectations about what kind of growth we are looking for in the economy. We’re looking for a little bit better than the trend.

So the second thing is that trend is a lot weaker than it used to be. And to some extent, I think that some of these statistical-based analyses miss that.

The third thing I would say about the national activity index and this is true about any statistical method, it does weight quite a bit data from the manufacturing sector. There is no question the strengthening of the dollar that started two years ago, the decline in oil prices which really cut back on investment and activity in the drilling and mining industry and the oil industry, those developments had a huge effect on the manufacturing sector and investment goods demand and things like that. So some of these statistical analyses that use the data we have, they tend to, just because the fact we have a lot of data on manufacturing and not as much on services, they tend to weight that quite a bit and so when manufacturing is strong, they tend to see a strong overall economy and when manufacturing is weak, a weaker overall economy. Most of the time, manufacturing moves with the economy, so that is not such a big issue. But right now manufacturing is weak, while the rest of the economy continues to grow, with the service sector being quite strong.

When you take a broader picture that really kind of focuses on the fact that the service sector is doing very well, the rest of the economy is doing well, and I don’t see that as a sign of weakness. It is just more that we’re running slightly above trend.

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